Is health care reform puncturing inflated profits?

Just days after it was enacted, large companies are decrying the unintended consequences of health care reform. Apparently, it’s exposing inflated profits at companies such as AT&T, Caterpillar, and Deere & Co.

On Friday, three days after the law was signed, AT&T made a filing with the Securities and Exchange Commission saying it would take a $1 billion non-cash charge in the first quarter to reflect changes in the tax treatment for its Medicare Part D subsidy.

AT&T, though, was a little slow in its corporate fear-mongering. Caterpillar made its filing one day after the law was signed, warning of a $100 million after-tax charge. Deere, meanwhile, said its tax expense would be about $150 million higher.

And we’re probably just getting started. A strict reading of accounting rules require companies to book the charge in the quarter in which the law changed, even though the rules won’t take effect for several years.

Accountants I spoke with noted these are non-cash charges, but it will affect companies’ reported net income. That, in turn, may erode the companies’ market value. Already, some are predicting this will gut the stock market’s recently rally. So far, though, shares of each of the companies have actually risen.